Fireman's Fund Ins. Companies v. Ex-Cell-O Corp.

• Decision Date: 19 November 1990
• Docket Number: No. 85-CV-71371.,85-CV-71371.
• Citation: 750 F. Supp. 1340
• Parties: FIREMAN'S FUND INSURANCE COMPANIES and American Insurance Company, Plaintiffs, v. EX-CELL-O CORPORATION, et al., Defendants. EX-CELL-O CORPORATION, et al., Third-Party Plaintiffs, v. AIU INSURANCE COMPANY (Successor to American International Insurance Company), et al., Third-Party Defendants.
• Court: U.S. District Court — Western District of Michigan

750 F. Supp. 1340

FIREMAN'S FUND INSURANCE COMPANIES and American Insurance Company, Plaintiffs, v. EX-CELL-O CORPORATION, et al., Defendants.

EX-CELL-O CORPORATION, et al., Third-Party Plaintiffs, v. AIU INSURANCE COMPANY (Successor to American International Insurance Company), et al., Third-Party Defendants.

No. 85-CV-71371.

United States District Court, E.D. Michigan, S.D.

August 30, 1990.

As Amended November 19, 1990.

Jeffrey Silberfeld, Rivkin, Leff & Radler, Uniondale, N.Y., Michael G. Costello, Plunkett & Cooney, Detroit, Mich., for American Intern. Ins. Co.

Eugene R. Anderson, Lynn A. Stansel, Nicholas J. Zoogman, New York City, Robert B. Webster, Richard C. Sanders, Peter

Metters, Hill, Lewis, Adams, Goodrich & Tait, Detroit, Mich., for Ex-Cell-O, McCord and Davidson.

Barry M. Kelman, Gofrank and Kelman, Southfield, Mich., H.G. Sparrow, III, Dickinson, Wright, Moon, Van Dusen & Freeman, Detroit, Mich., Mary Vyskocil, Simpson, Thacher & Bartlett, New York City, for Travelers Ins.

John W. Henke, Gropman, Lebow & Tobin, Birmingham, Mich., Paul L. Gingras, Zelle & Larson, Minneapolis, Minn., for Wausau Ins. Co.

Paul S. Koczkur Harvey, Kruse, Westen & Milan, Detroit, Mich., for Integrity Ins. Co.

Peter B. Kupelian, Tucker & Rolf, Southfield, Mich., for Zurich American Ins. Co.

Leonard B. Schwartz, Sommers, Schwartz, Silver & Schwartz, Southfield, Mich., for Royal Indem.

Deborah A. Pitts, Robert A. Zeavin, Buchalter, Nemer, Fields, Chrystie & Younger, Los Angeles, Cal., James R. Case, Kenneth C. Harrison, Kerr, Russell and Weber, Detroit, Mich., for AIU Ins. Co. and Highland Ins. Co.

Charles C. Cheatham, Dwight Robinson, James G. Gross, MacArthur, Cheatham, Acker & Smith, Detroit, Mich., for American Employers Ins. Co.

David M. Tyler, Sullivan, Ward, Bone, Tyler, Fiott & Asher, Southfield, Mich., Michael G. Bruton, Michael J. Merlo, Pretzel, Stouffer, Chartered, Chicago, Ill., for Prudential Re-Insurance Co.

Andrea Sykes Foote, Lord, Bissell & Brook, Chicago, Ill., Thomas F. Myers, Garan, Lucow, Miller, Seward, Cooper & Becker, Detroit, Mich., for Certain Underwriters at Lloyd's, London and London Market Ins. Co.

Stephen M. Kelley, Kitch, Saurbier, Drutchas, Wagner & Kenney, Detroit, Mich., Mitchell L. Lathrop, Adams, Duque & Hazeltine, San Diego, Cal., for St. Paul Fire & Marine Ins. Co.

James R. Case, Kenneth C. Harrison, Kerr, Russell & Weber, Detroit, Mich., for Federal Ins. Co.

Michael W. Hartmann, Miller, Canfield, Paddock & Stone, Detroit, Mich., Timothy C. Russell, Wilson M. Brown, III, Patricia A. Gotschalk, Drinker, Biddle & Reath, Washington, D.C., for Am. Motorists, Am. Manu. Mut., Lumbermens Mut.

Paul S. Koczkur, Harvey, Kruse, Westen & Milan, Detroit, Mich., for Mission Ins. Co. and Mission Nat.

T. Joseph Seward, Bernard P. McClorey, Ronald G. Acho, Cummings, McClorey, Davis & Acho, Livonia, Mich., L. Anthony Sutin, William J. Bowman, Hogan & Hartson, Washington, D.C., for Hartford Acc. and Nelson R. Goodrich.

Scott L. Gorland, Phyllis Golden Morey, Barbara Colby Tanase, Pepper, Hamilton & Scheetz, Detroit, Mich., Stephen Jacobs, Amy B. Gallent, Siff, Newman, Rosen & Parker, New York City, for First State Ins. and New England Reins. Corp.

James N. Martin, Victor Van Kamp, Martin, Bacon & Martin, Mt. Clemens, Mich., John W. Stamper, O'Melveny & Myers, Los Angeles, Cal., for Pacific Employers Ins. Co.

William Jamieson, Denenberg, Tuffley, Bocan, Jamieson, Black, Hopkins & Ewald, Southfield, Mich., for Northbrook Excess and Surplus Ins. Co. ("NESCO").

J.R. Zanetti, Jr., Highland & Currier, P.C., Southfield, Mich., for Transport Indem. Co.

AMENDED MEMORANDUM OPINION AND ORDER

FEIKENS, District Judge.

Plaintiff insurers, Fireman's Fund Insurance Companies and American Insurance Company, filed this suit for declaratory judgment against their insureds Ex-Cell-O Corporation ("Ex-Cell-O"), McCord Gasket Corporation ("McCord"), and Davidson Rubber Company ("Davidson") (collectively "policyholders"),¹ and two other insurers of policyholders, Travelers Insurance Company and Employers Insurance of Wausau. Policyholders, in turn, filed a third-party complaint seeking declaratory judgment against Travelers, Wausau, and additional insurers.²

The parties seek a declaration of their respective rights and obligations under comprehensive general liability ("CGL") and excess liability insurance policies. Policyholders have received notices from the United States Environmental Protection Agency ("EPA") and state agencies that they may be potentially responsible for environmental contamination at a number of landfill sites and a plant site, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA," otherwise known as Superfund), 42 U.S.C. §§ 9601-75, and state statutes. Policyholders notified insurers of these claims and of their contentions that the policies at issue cover environmental cleanup costs for which they may be held liable. Insurers denied liability.

I. Procedural History

Various settlements have been negotiated between policyholders and insurance companies. Four sites remain — Cardinal landfill (Farmington, New Hampshire), Dover Municipal landfill (Tolend Road) (Dover, New Hampshire), Farmington Plant Site (Farmington, New Hampshire), and Ottati & Goss (Kingston Steel Drum) (Kingston, New Hampshire). Four insurance companies also remain. Wausau was the primary carrier from 1970 to 1979. Companies which issued excess coverage policies are American Employers, First State, and New England.

Previous opinions in this case address numerous related issues. I concluded that the insurance companies have a duty to defend policyholders against the claims of government regulatory agencies; that the "owned property" exclusion does not apply because the claims at the Farmington plant site include property damage to adjoining landowners and to the public; and that each exposure of a pollutant to the environment constitutes an "occurrence" and triggers coverage. Fireman's Fund Insurance Co. v. Ex-Cell-O Corp., 662 F.Supp. 71 (E.D.Mich.1987), motion for leave to appeal denied, 682 F.Supp. 34 (E.D.Mich. 1987). In a later opinion, I concluded that "sudden" in the "sudden and accidental" exception to the pollution exclusion clause "includes the temporal component of briefness, and means `brief, momentary, or lasting only a short time.'" Fireman's Fund Insurance Co. v. Ex-Cell-O Corp., 702 F.Supp. 1317, 1326 (E.D.Mich.1988) (citing United States Fidelity and Guaranty Co. v. Star Fire Coals, Inc., 856 F.2d 31 (6th Cir.1988)), reconsideration denied, 720 F.Supp. 597 (E.D.Mich.1989).

At the onset of a bench trial³, I considered a number of dispositive motions and granted partial summary judgment as to the Cardinal landfill and Dover Municipal landfill sites to AIU Insurance Company and Highlands Insurance Company for all years for which they issued policies to policyholders; to Wausau for the policy periods January 1, 1973 through January 1, 1979; and to New England for the policy periods January 1, 1975 through January 1, 1979. I granted summary judgment also as to the Keefe Environmental Services site (Epping, New Hampshire) to Highlands Insurance Company, American Employers, and First State for all years for which they issued policies to policyholders; to New England for the policy periods January 1, 1975 through January 1, 1978; and to Wausau for the policy periods January 1, 1970 through January 1, 1978. I found that insurers are not liable to indemnify policyholders for the Cardinal and Dover sites under policies containing the pollution exclusion clause.⁴

On the third day of trial, policyholders withdrew all claims for insurance coverage in connection with the Keefe Environmental Services site. Policyholders also withdrew their claims for coverage as to the Ottati & Goss site under all policies containing the pollution exclusion clause. On the fifth day of trial, the claims against AIU Insurance Company and Highlands Insurance Company were dismissed because those parties negotiated a settlement with policyholders.

At the conclusion of the trial, I granted a motion for partial judgment of no cause of action as to the Farmington plant and Ottati & Goss sites to American Employers because policyholders failed to produce evidence of an "occurrence" at either site during the American Employers' policy years, February 1969 through February 1972. I also granted a motion for judgment of no cause of action as to the Ottati & Goss site to First State because policyholders failed to produce evidence of an "occurrence" at that site during First State's policy years, January 1972 through January 1975.

II. Background

A. Insurance Policies

Thirteen CGL insurance policies remain at issue in this action. Wausau issued nine primary insurance policies to McCord. (PX 73-80). American Employers and First State each issued one excess insurance policy to McCord. (PX 31 and 62, respectively). New England issued two excess insurance policies to McCord. (PX 115, 156). Each of these primary and excess policies names Davidson as an additional named insured. Chart I depicts a summary of policyholders' insurance coverage at issue in this case:

                                               Chart I
                Company              Policy Number    Policy Period
                Wausau               1721 00 040499   1/1/70-1/1/71
                                     1722 00 040499   1/1/71-1/1/72
                                     1723 00 040499   1/1/72-1/1/73
                                     1724 00 040499   1/1/73-1/1/74*
                                     1725 00 040499   1/1/74-1/1/75*
                                     1726 00 040499   1/1/75-1/1/76*
                                     1727 00 040499   1/1/76-1/1/77*
                                     1728 00 040499   1/1/77-1/1/78*
                                     1729 00 040499   1/1/78-1/1/79*
                American Employers   A22-8500-266     2/1/69-2/1/72
                First State          900305           2/1/72-1/1/75
                New England          681199           1/1/75-1/1/78*

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